Baucus expects post-election plan

BUTTE, Mont. — An emboldened President Barack Obama would quickly unveil a sweeping proposal aimed at preventing the country from falling off the fiscal cliff if he wins reelection Tuesday. At least, that’s what one top Senate Democrat expects him to do.

Senate Finance Chairman Max Baucus (D-Mont.), a central player in the fiscal talks, said in a weekend interview here that he expects a victorious Obama to lay out a “balanced” plan that will drive the lame-duck talks over taxes and spending looming over Washington once Election Day passes.

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“I expect that the president, soon after the election, is going to make a proposal to the Congress that’s balanced, got some spending cuts and some revenue-raisers, and it’s not too draconian because we can’t stifle the economic growth that we’re moving toward, that’s being maintained,” Baucus told POLITICO. “At the same time, we’re getting that debt down.”

Baucus was vague on the exact policy prescription, and he noted that he wasn’t sure if the White House had a plan it was ready to present. But the chairman of the powerful tax-writing committee is more than just an innocent bystander: Throughout the congressional recess, the six-term senator has been holding talks with key figures in the fiscal talks, such as Treasury Secretary Timothy Geithner, and he’ll certainly help dictate the terms of the year-end negotiations once Congress returns to session next week.

Baucus’s signal that he expects Obama to unveil a “balanced” approach is another sign that the president will likely push for a tax hike on high earners, which has been the central plank of his campaign platform.

Still, Baucus said at this point before the elections, “it’s very, very difficult” to tell how the talks would take shape, since much of it will be driven by the makeup of the incoming House and Senate and “what’s the feel and the tone and mood” after Tuesday.

The laundry list for Congress is long: the expiration of all the Bush-era tax cuts; the $109 billion in automatic spending cuts set to take place next year; a reimbursement fix for Medicare physicians; expiring jobless benefits and the lapse of the payroll tax cut; among other things. If Mitt Romney wins, most expect Congress to draft a short-term extension, giving the new president time to write a budget and deficit deal early next year. Neither Romney nor Obama has detailed specifics on how they’d avert the year-end mess throughout the campaign season

But there remains a very real possibility that no deal is reached and Washington falls over the so-called fiscal cliff, which economists fear could lead to another recession. Many economists believe that about a $4 trillion deficit-cutting deal is critical to reverse the growth in the national debt, something that has eluded Congress for the past two years. Most Republicans are adamantly opposed to raising any taxes, while some in the GOP are open to higher revenues so long as Democrats entertain cuts to entitlement programs like Medicare.

Baucus says the direction of the negotiations will in part depend on the strength of tea party Republicans in the House and their ability to “handcuff” Speaker John Boehner and committee chairmen. But, at the end of the day, the 70-year-old Montana Democrat says the White House will drive the year-end talks far more than Capitol Hill will.

“I expect it’s more in the hands of the president,” Baucus said. “He does have the bully pulpit, and he really wants to address this in a solid way. … I’m very hopeful he’ll get the ball rolling.”